The effects of Tnt1 retrotransposon insertion on nitrate reductase (NR) gene transcription have been analyzed in three NR-deficient insertional, mutants of Nicotiana tabacum. In the three mutants, named h9-Nia4, h9-Nia5 and h9-Nia6, Tnt1 was inserted into exon 3, exon 2 and exon 1 of the nia2 NR alloallelle, respectively. The mutants h9-Nia4 and h9-Nia6, which contained Tnt1 insertions that were oriented opposite to the direction of nia2 gene transcription, expressed chimaeric nia2-Tnt1 RNAs, respectively 12 kb and 10 kb long. The size observed in h9-Nia6 was close to the expected size for a full-length hybrid transcript starting and ending under the control of nia2 signals (about 9 kb). The larger transcript found in h9-Nia4 was shown to be due to a failure to splice the nia2 intron 2. The mutant h9-Nia5, which contained a Tnt1 insertion oriented in parallel with the direction of nia2 transcription expressed two truncated nia2-Tnt1 RNAs, 2 kb and 6.7 kb long. These transcripts arose from termination in the long terminal repeats (LTRs) of Tnt1. Since no full-length hybrid RNA was detected, we suggest that Tnt1 carries efficient termination signals, which are more efficiently recognized in the 3' LTR than in the 5' LTR.